Bumi investigates alleged financial irregularities

Bumi shares tumbled after the thermal coal producer said it had started an
urgent investigation into allegations of potential financial and other
irregularities at its Indonesian operations.

Bumi is a major exporter of thermal coal

8:22AM BST 24 Sep 2012

The company, which financier Nat Rothschild brought to London, said in a statement on Monday that the allegations related to PT Bumi Resources, Asia's biggest thermal coal exporter, in which Bumi owns a 29pc stake.

Bumi

Bumi said: "An area of focus of the investigation will be the development funds of PT Bumi Resources".

Extensive development funds in PT Bumi Resources and the one development asset in PT Berau Coal Energy were marked down to zero in Bumi accounts as of December 31, 2011, except for one investment with a carrying value of $39m in the consolidated financial statements.

The independent investigation will report to the board and Bumi said it would contact "relevant authorities in the UK and Indonesia ... in respect of some of the allegations".

The miner, one of the world's largest thermal coal exporters, listed in London over a year ago but its share price has dragged, hit by boardroom scuffles, worries over debts at its subsidiaries, and its complex structure.

Mr Rothschild stepped down as co-chairman of the FTSE 250 coal business in March after falling out with his Indonesian partners in the venture.

Last autumn, a letter was made public in which Mr Rothschild said Bumi’s major subsidiary needed a “radical cleaning-up”, seen as a show of frustration with the Bakries, a powerful Indonesian family.